Kenmare trims 2026 ilmenite target after WCP A ramp-up lags

Kenmare Resources, one of the world's largest producers of titanium minerals, lowered its 2026 ilmenite production guidance to roughly 800,000 tonnes after commissioning delays at its upgraded Wet Concentrator Plant A held back first-half output.

The company shipped 555,600 tonnes of titanium minerals and zircon in the first six months, a pace that keeps the full-year target of at least 1.1 million tonnes within reach. Shipments in the second quarter jumped 53% year on year to 277,700 tonnes, helped by drawdown of finished product stockpiles and consistent transshipment performance.

HMC production fell 37% in the second quarter to 225,000 tonnes. A 29% drop in excavated ore grades caused the decline. WCP A is nearing the end of its current mine path at Namalope. Excavated ore volumes also fell 6% on the year, partly because the plant's slower-than-expected ramp-up forced a temporary halt to dry mining at WCP B for most of the quarter.

Tom Hickey, managing director, said the company maintained a strong safety record with no lost-time injuries since December 2025. He acknowledged the production shortfall.

"Production was lower than expected due to ongoing challenges with the commissioning of WCP A following the upgrade work," Hickey said. "Production is anticipated to increase in the second half, with continued improvements at WCP A and a stronger performance at WCP B."

WCP A is Kenmare's largest mining plant. It is scheduled to begin transitioning to the Nataka ore zone in the second half. Nataka holds about 70% of Moma's nine billion tonnes of mineral resources. The plant's nameplate capacity is 3,500 tonnes per hour. It averaged 2,800 tph in the second quarter because of dredging performance issues. Kenmare is working with suppliers and consultants on fixes, including debottlenecking the desliming circuit. Throughput and utilisation improved sequentially from the first quarter, the company said.

The ilmenite market remained soft in the second quarter. Chinese domestic production, particularly from Xinjiang Province, and additional African concentrates from Mozambique and Sierra Leone kept prices under pressure. In Western markets, feedstock availability stayed constrained by production curtailments and mine closures.

The zircon market strengthened during the quarter. Kenmare achieved higher prices for all zircon products. Supply tightened and demand exceeded availability in both Western and Chinese markets. The company's new concentrates product, ZrTi, also saw strong demand. Concentrates production surged 770% year on year to 90,500 tonnes, largely because of a one-off conversion of 75,000 tonnes of historically stored tailings into ZrTi. Kenmare expects to generate 30,000 to 40,000 tonnes of ZrTi per annum in future years, though that could fall if recovery to primary products improves.

Hickey said the zircon market recovery was encouraging. "We also saw encouraging demand for our new concentrates product, ZrTi, with full year concentrates guidance materially exceeded in the first half," he said.

Kenmare ended June with $31.0 million in cash and cash equivalents, down from $48.6 million at the end of 2025. Gross bank loans stood at $205.9 million, leaving net debt at $175.7 million, up from $158.8 million six months earlier. The company secured a $30 million upsize to its $200 million revolving credit facility during the quarter, along with adjustments to financial covenants.

"This provides important additional financial flexibility during this period of weak market conditions," Hickey said.

Capital expenditure on the WCP A upgrade has fallen sharply now that major construction and installation work is complete. Kenmare spent about $23 million of the planned $30 million in the first half, leaving roughly $7 million for the second half.

The company is building a second small-scale dredge mining operation, SMO 2, with a capacity of 1,000 tonnes per hour. The first 500 tph phase is expected to be commissioned in the fourth quarter at a cost of $5.3 million. The second phase is scheduled for 2027.

Kenmare is negotiating renewal of its Implementation Agreement with the Government of Mozambique. The agreement grants certain rights and concessions for processing and export activities. Hickey said the company has provided clarification of its financial proposal and investment intentions over the renewal period, including planned social investments. Kenmare is pursuing a near-term negotiated renewal while reserving the right to seek arbitration if no agreement is reached.

The company will report its first-half results on 19 August.